Andrew Bailey, Missouris attorney general, decided to sue the Biden administration without the involvement of the Missouri Higher Education Loan Authority, which holds and services many student loans in the state. President Joe Biden speaks about the student loan forgiveness in the South Court Auditorium on the [+] White House complex in Washington, Monday, Oct. 17, 2022. The Supreme Court is expected to hear arguments in two cases about student debt on Tuesday. Galen Bacharier/Springfield News-Leader/USA Today Network. 00:00:08.842 > 00:00:11.668 And it all then turns on the, I think, 00:00:11.668 > 00:00:14.550 the language of the statute at issue 00:00:14.550 > 00:00:16.420 and the kind of action taken. The total cost if the program ever goes into effect has been calculated at more than $400 billion, with the administration estimating that 20 million people would have all of their remaining student loan debt canceled. 1. If you received a Pell Grant and meet those income requirements, you could qualify for an extra $10,000 in cancellation. Mr. Campbell deflected, saying that decision was a question of state politics.. The fate of millions of student-loan borrowers is set to be decided this week. In separate cases, six Republican-led states Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina and two individuals sued to stop the new plan, relying on recent decisions employing the major questions doctrine. (AP Photo/Susan Walsh). The Borrower Defense program allows federal student loan borrowers to request debt relief, including loan discharges, if they were misled or defrauded by their school. That answer underscored how partisan the fight over loan forgiveness has become. The court will next hear arguments in a second case, which raises similar issues. 2023 Q1 $1.78T Note: Not adjusted for inflation Chart: Gabriel Cortes / CNBC Source: Board of Governors of the Federal Reserve System via FRED Data as of May 5, 2023 As a result of the policy,. There was something close to a consensus that the debt forgiveness program qualified as major. I may have views on the fairness of that and mine dont count, Chief Justice Roberts said. But he said that his sons girlfriend was set to have the maximum amount of student loan debt, $20,000, forgiven by Mr. Bidens plan. The plaintiffs in the Supreme Court cases have argued that Mr. Bidens plan to cancel debt oversteps his executive authority and the scope of the law the administration used to justify it. Biden was hesitant at first to use executive power for student loan relief. During that time, she worked for the special counsel, Robert S. Mueller III, as part of the team investigating Russian interference in the 2016 election. The law the administration relied on, the Higher Education Relief Opportunities for Students Act of 2003, usually called the HEROES Act, gives the secretary of education the power to waive or modify any statutory or regulatory provision to protect borrowers affected by a war or other military operation or national emergency.. If the administration is to prevail, it would probably be on the ground that none of the plaintiffs in the two cases had established standing to sue, but that outcome did not seem likely, either. The ruling is set to be made by Dec. 1. It appears the only avenue for the Biden administration to prevail would be if the court were to conclude that the challengers do not have legal standing to bring their cases in the first place because they cannot show they would be harmed by the program. The major questions doctrine is the idea that Congress must have provided explicit and clear statutory authority for an agency to regulate an issue with great economic, political or policy significance. Six Republican-dominated states Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina and two individuals sued to stop the plan. In August, the administration said it planned to switch gears, ending the repayment pause but forgiving $10,000 in debt for individuals earning less than $125,000 per year, or $250,000 per household, and $20,000 for those who received Pell grants for low-income families. The next day the court is expected to issue rulings is Thursday, the first day of June, with decisions coming thick and fast for the rest of the month. We need to educate people. President Joe Biden's administration officially . 00:01:20.850 > 00:01:23.040 On the merits, the states say the act 00:01:23.040 > 00:01:25.410 doesnt authorize the secretary to ever forgive 00:01:25.410 > 00:01:26.590 loan principal. Arguments in the first case over the Biden administration's student loan relief program, which is a challenge brought by a group of Republican-dominated states, have concluded. The whole point of this statute, its central mission and function, is to ensure that in the face of a national emergency that is causing financial harm to borrowers, the secretary can do something, she said. The pause was originally supposed to end on December 31, but payments will now not resume until 60 days after a Supreme Court ruling or June 30, 2023, whichever occurs first. President Biden speaking about student loan forgiveness last year at Delaware State University. The decision said that Texas didn't have standing in the suit, as the federal immigration policy didn't directly harm the state. Feb. 28, 2023, 11:20 a.m. Jim Campbell, the solicitor general of Nebraska, is now arguing that the Supreme Court should block the Biden administrations student loan forgiveness program. In the Supreme Court, the states are also arguing that the loan forgiveness program would cause their tax revenues to fall. In the short-term, the Court could also impose a temporary stay while it considers the appeal, which could force the Education Department to halt implementation of the settlement relief yet again. Why not just read that as written, he said. In defending the plan, the Biden administration cited a 2003 law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, which says the government can provide relief to recipients of student loans when there is a national emergency, allowing it to act to ensure people are not in a worse position financially as a result of the emergency. WASHINGTON For months, the Biden administrations ambitious plan to discharge billions of dollars of student loan debt has been on ice, blocked by lower courts, its fate left in the hands of skeptical conservative justices on the Supreme Court. And its wrong to force people to be instruments for influencing others in that way. Yet another legal dispute over student loan forgiveness may be headed to the Supreme Court, leaving thousands of borrowers unsure of whats to come. Bidens one-time student loan cancellation program would have allowed 40 million borrowers to receive up to $20,000 in federal student loan forgiveness. A ruling in their favor would not grant Brown and Taylor the additional debt relief they say they desire; rather, it would mean that nobody gets any debt relief at all, the brief said. Elizabeth B. Prelogar, only the second Senate-confirmed woman to serve as solicitor general, will represent the Justice Department before the Supreme Court on Tuesday when it hears oral arguments on President Bidens plan to forgive an estimated $400 billion in student loan debt. Democratic lawmakers like Senators Bernie Sanders, Elizabeth Warren and Robert Menendez and Representatives Ayanna Pressley and Judy Chu addressed supporters of the plan from the steps of the Supreme Court. He is waiting to learn whether he can access the money a refund for payments he had made on his federal student loans since March 2020, when the government told borrowers that they could stop paying temporarily because of the pandemic or must send it back. Thats part of his economic plan.. Without clear congressional authorization, the court said, the agency could not act. And the other lawsuit, Biden v. Nebraska, was filed by six GOP-led states who argued the debt relief would hurt their states' tax revenues, along with the revenue of the student-loan company MOHELA. But there was little evidence that the conservatives were particularly receptive to the administrations position on that issue in the first case, Biden v. Nebraska, No. On Monday at an event celebrating Black History Month, Mr. Biden mentioned the next days arguments. Justice Kagan said it was significant that the loan authority itself had not sued over the debt forgiveness program. "In their minds, it would be transformative," Aja added. The Biden administration argues the HEROES Act of 2003 gives it the authority to forgive loans. While critics consider the plan a pricey giveaway that could exacerbate inflation, the White House fears that without debt cancellation many borrowers will be walloped when payments resume, leading to what the Education Department projected could be a historically large increase in defaults and delinquencies. The two groups of plaintiffs did justify their standing to sue on different grounds, but there is nothing to prevent the justices from ruling on that threshold question in a single decision. At this point, a . After the arguments, heres what to expect. With Mr. Bidens plan blocked by legal challenges, preventing the government from canceling any debt, about 26 million borrowers have been stuck in limbo, swinging between hope and despair. Biden and Cardona had proposed a plan that would eliminate up to $10,000 of student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. WASHINGTON Hundreds of protesters, many college students from across the country, rallied outside the Supreme Court on Tuesday, carrying signs and posters urging the justices to back President Bidens effort to cancel some $400 billion in student loan debt. Its just very hard for me to say that there is an interest sufficient for the state to speak on behalf of an entity who has the right to sue or be sued, Justice Sonia Sotomayor said. "We are here to fight, and we are here to make sure, and encourage, and have the president's back, in making sure that this cancellation goes through for the millions of people in the United States.". She has argued before the Supreme Court 19 times, including five last year, when she argued that the state of Texas had violated the Constitution when it enacted its law that bans most abortions and empowers private citizens to enforce the statute. Hundreds of protesters outside the court, many of whom were college students from across the country, underscored that point. Treasury Secretary Janet Yellen also worried about the economic impacts of the relief and how it would affect soaring consumer prices. But should the program move forward, millions of potential beneficiaries will have plenty of questions about eligibility and the process. They appealed to the Ninth Circuit Court of Appeals, asking for yet another stay of the settlement implementation. Student loan cancellation was also viewed by some in the White House as one of a primary ways for the president to make good on his commitment to make racial equity a priority of his administration. Heres How You Can Protect Yourself, With Student Loan Payments Resuming, Here Are 6 Easy Ways To Cut Other Expenses, FDA Has Approved The Anti-Alzheimers Drug Leqembi. The Supreme Court is expected to issue its decision Friday . But when its a big part of your actual net worth or savings, it really matters., Supreme Court Heard Arguments Challenging Student Loan Forgiveness. For now, absent any further court orders, the Education Department is continuing with its plans to implement the Sweet v. Cardona settlement relief. The challengers say the administrations proposal announced by Biden in Augustand originally scheduled to take effect last fall violated the Constitution and federal law, partly because it circumvented Congress, which they said has the sole power to create laws related to student loan forgiveness. 6 min. To the people making these decisions, $10,000 is not a lot of money, said Mr. Doresky, who graduated from the University of Kansas in 2015. The individual borrowers, the brief added, would be no better off if they prevailed. The court also ruled, on similar grounds, that the Centers for Disease Control and Prevention was not authorized to impose a moratorium on evictions and that the Occupational Safety and Health Administration was not authorized to tell large employers to have their workers vaccinated against Covid-19 or undergo frequent testing. Nearly two years later, he signed off on relieving $10,000 in debt for those earning less than $125,000 per year and $20,000 for those with Pell grants for low-income students. Opinions expressed by Forbes Contributors are their own. A federal appeals court then blocked the program, focusing on the possibility that a nonprofit entity that services federal loans, the Missouri Higher Education Loan Authority, might fail to make payments to Missouri if the program were allowed to proceed. $24 Billion In Student Loan Forgiveness Approved Under Waiver, Says Education Department, With More Coming, This is a BETA experience. But some advisers argued that Mr. Biden could relieve inflation if he paired loan cancellation with a restart of the interest payments on student loans, which have been paused since early in the pandemic. The US Supreme Court in Washington, DC, on June 27, 2023. A key author of the statute filed an amicus brief with the Supreme Court, arguing that this type of debt cancellation program is exactly the kind of modifications that Congress intended when it enacted the legislation. 1:54. Consumer advocacy groups, however, have urged the Biden administration to consider the HEA provision as a backup option if the Supreme Court rejects the HEROES Act authority. We want this new generation to make a better future., Eric Lotke, a father of two from Arlington, Va., said he understood the argument of those who insist that students should take responsibility for the cost of their education, like previous generations did. In his last one, published in September 2019, he talked about defending a T-shirt maker who did not want to print shirts promoting a local gay pride festival before the Kentucky Supreme Court. Justice Elena Kagan sounds exasperated at the framing of the loan relief program as executive power, contending that Congress created the authority to cancel debts in national emergencies. Ms. Prelogar noted that the Trump administration had also relied on the 2003 law. The latest dispute is over the Sweet v. Cardona case, a long-running class action lawsuit brought by student loan borrowers against the Education Department over allegedly stalled or improperly denied Borrower Defense to Repayment applications. Sarah Silbiger for The Washington Post via Getty Images file. Mr. Biden for months preferred student loan relief to come through congressional legislation, rather than executive action that his staff knew would likely be met by Republican-led court challenges. President Biden speaking about his student loan forgiveness program at Delaware State University in Dover in October. WASHINGTON, DC - APRIL 04: U.S. President Joe, Biden holds a meeting at the White House on April 04, 2023 in Washington, DC. However, major Supreme Court decisions are typically released in June. WEBVTT 00:00:00.000 > 00:00:08.256 Education. Is a right.. Not everyone with debt will qualify for the student loan forgiveness plan. A version of the law enacted in 2001 after the Sept. 11 attacks gave the secretary of education the power to waive or modify any statutory or regulatory provision to protect borrowers affected by terrorist attacks. Jim Campbell, the solicitor general of Nebraska, deflected and said that decision was a question of state politics., The Supreme Court is increasingly insisting on clear grants of congressional authority to executive agencies in cases with significant political or economic consequences. I can see why theres backlash against Mr. Bidens plan, she said, but Ms. Selter said she saw the debt cancellation as an investment in the nations future. Heres how the arguments typically unfold. The three schools fail to demonstrate a sufficient probability of irreparable harm to warrant a stay of the challenged settlement pending these appeals, the court noted in its brief decision. However, the request for a stay has been submitted to Justice Elena Kagan, one of the liberal members of the court, who may be unlikely to agree with the schools arguments. 00:00:48.850 > 00:00:51.420 Hes not changing anything within them. Millions more are believed to qualify under the terms of the program. The point of the standing doctrine, Justice Ketanji Brown Jackson said, is to allow the political branches to hash this out without interference, you know, from a torrent of lawsuits brought by states and entities and individuals who dont have a real personal stake in the outcome.. Chief Justice John G. Roberts Jr., employing the phrase for the first time in a majority opinion, said it applied in cases of unusual significance and was meant to address a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.. That shame was never yours to carry, she said. White House press secretary Karine Jean-Pierre said the administration remained confident in the plan on Monday, one day before the Supreme Court oral arguments were set to begin. The first case, Biden v. Nebraska, was brought by six Republican-controlled states that challenged the Education Departments student debt relief plan. Jul 1, 2023, Jul 1, 2023, Forbes Money Personal Finance Another Student Loan Forgiveness Challenge Heads To Supreme Court Key Updates Adam S. Minsky Senior Contributor I'm an. The solicitor general of Nebraska, Jim Campbell, argues that the Biden loan forgiveness program goes too far. On average, it takes the court about three months after an argument to issue a decision. Although the court heard arguments in two separate cases, it may well rule on them in a single decision. Nebraskas solicitor general is making his first appearance before the justices. To the borrowers whose loans it services, it looks and acts a lot like a private company, but its profits are returned to Missouri. If the administration were to win the case, it would not remove all potential impediments to the plans moving forward, as other cases are pending in lower courts, but if the challengers do not have legal standing, it would suggest other people and entities bringing cases are unlikely to do so, either.
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